SingPost to develop $182m eCommerce logistics hub in Tampines

It will be fully operational by 2016.

In yet another push to become a regional logistics and e-commerce player, Singapore Post revealed last evening that it will be developing a three-storey fully integrated regional e-Commerce logistics hub in Tampines for $182m.

The facility will be located in Tampines LogisPark and will be fully operational by 2H16. It will cater to the Postman’s iexpanding e-commerce logistics business and the fast-growing e-commerce market.

According to OCBC, there is room for Singapore’s e-Commerce scene to grow, as the country’s e-commerce sale volume as compared to the total retail market size was remains relatively low.

“Given the recent Alibaba placement and Singpost’s push to transform itself as a regional logistics and e-Commerce player, we think it is justifiable to impute higher growth assumptions in SingPost’s earnings ahead. In our 3-stage DCF model, we have increased our FCFE growth assumption for FY19-FY23 from 5% to 9%, which is justifiable given 1) the significant growth potential of e-Commerce sales in Singapore and the region, 2) the accompanying rise in logistics services that are required to support this growth, and 3) the likelihood of SingPost directing its huge cash pile to earnings-accretive investments in the next few years,” noted OCBC.

Here’s more from OCBC:

Singapore’s rising importance as a logistics hub is also highlighted by recent investments in warehouse and distribution facilities by DHL and Menlo Logistics. 

In addition, SingPost, being a postal operator, may be already sitting on a huge amount of data waiting to be monetized. 

The partnership between postal operators and e-retailers may thus extend beyond the posts’ role of enablers of e-Commerce to supporting the e-retailers to expand and grow by analyzing, translating and interpreting data.